Updated: Rediff Shuts Music Streaming Service Songbuzz

Update: Speaking with MediaNama, Rediff Chairman Ajit Balakrishnan said that Songbuzz is down because Rediff’s contract with T-Series is over, and “we’re not renewing that because of the cost.” 80 to 90% of Songbuzz was from T-Series, and Balakrishnan said that it is extremely risky in India for Rediff to risk a model with user uploads. “It was impossible to license Western Music too – either the economics don’t work out, or you operate a site that has no India links, where users can upload music.”

Balakrishnan said that Songbuzz was marginal to Rediff’s business, but the site had a cult following of a few passionate users.

On the monetization front, sites like Dhingana and Saavn now have online advertising, having recently launched their ad platforms, and Gaana.com tried to monetize through a mix of branding and integration of ringbacktone downloads with Airtel.

The monetization part of this business is yet to be figured out, but it is likely that the cost of music licensing for the Internet will change. Why? Because one key avenue for monetization for music – mobile VAS – is currently under tremendous pressure due to the enforcement of TRAI guidelines. With VAS companies unwilling to pay minimum guarantees, there is bound to be pressure for monetization through other means, which means that music labels might be more willing to allow streaming at lower costs, with the intent of creating a market for more and more music streaming services.

So, this begs the question: with the market on the verge of a shift, why is Rediff pulling the plug on Songbuzz? We’ll update when we have a response from Rediff.

we all know that T-series license per year is crores of rupees. indian consumer wants everything for free….Saavn already opted out from T-series and now focusing on english content. Dhingana, having started as a gossiping portal of bollywood sexy photos with PPL interactive license was able to attract indian janta with low income and low education. but business model prospects are ZERO except the advertising revenue. T-series and Saregama ( which is now mostly ex-employees of T-series and Hungama ) will have to mend their ways to reduce minimum guarantee …now that IPRS is enforced streaming is very expensive and market is very crowded offering the same feature…no one in india will pay for subscription over smart phone